Google Earnings: Misses Bottom Line, Shares Down

By Matt Phillips

Google missed Wall Street’s expectations for the bottom line. The search giant notched non-GAAP EPS of $6.45, a bit shy of the $6.52 consensus. Revenues, excluding those shared with partner websites, were $5.09 billion, better than the $4.98 billion consensus. After hours, the shares are down roughly 4%.

Cost-per-click: Rose about 4% in the second quarter, compared to the prior year. They were up approximately 2% versus the first quarter of 2010. That seems to be around what analysts were looking for.

Paid Clicks: Rose about 15% versus second quarter of 2009 and fell about 3% against the first quarter of 2010. The second quarter’s 15 rise is the same year-over-year gain as we saw during the first quarter and that didn’t impress investors much. It’s also bit shy of J.P. Morgan analyst Imran Khan’s expectation for 16% increase in paid clicks year-over-year.

Revenue: The impact of the strengthening dollar during the second quarter weighed on revenues. “Had foreign exchange rates remained constant from the first quarter of 2010 through the second quarter of 2010, our revenues in the second quarter of 2010 would have been $176 million higher,” the company said in its press release. Still, overall revenue jumped to $6.82 billion from $5.52 billion.

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